Agency Workers Regulations 2010 laid before parliament

The much anticipated Agency Workers Regulations 2010 were laid before parliament in January. The regulations are intended to give agency workers equal entitlement to pay and leave arrangements as if they had been recruited directly by their hirer, following an EU Directive finalised in December 2008. The Regulations are due to be adapted into law by March 2010 with application from October 2011.

The good news is that the proposal to introduce a reasonableness test for charging of transfer fees has been dropped. Adrian Marlowe, MD of Lawspeed and chairman of the Association of Recruitment Consultancies (ARC), said “We saw this recruiter specific proposal as highly dangerous for the temp contracting industry, leading to a potential blood bath as hirers switch workers from one agency to another, and we mounted a detailed and well publicised campaign to stop it. I am therefore very pleased to see that the Government statement indicates plans to drop the test in any form and to scrap the proposal leaving the transfer fees regulations unaffected.”

However, contrary to some reports, it appears that limited company contractors are not strictly excluded. In fact the Government response document makes it clear that the idea of exclusion for those operating through limited companies was rejected, and this is reflected in the Regulations. Instead the government provides an exception for those running their own business of which the hirer is a customer. This is of course quite distinct from the simple personal service company model.

Adrian Marlowe said “we are working our way through these regulations, which are complicated. Anyone seeking advice on what to do should not rush to any early conclusions since the application of the current form of the regulations may well depend on the election result. I understand the Conservatives have vowed to revisit them if they get in. However agencies should certainly be talking about these issues with their clients and Lawspeed can help in this area.”

Lawspeed will be working on effective solutions in due course. Watch this space for further details.

Employment status case law update
ARC reports on the Agency Workers Directive Part 2